SECURITIES LAWS AND COMPLIANCES

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266
Roll No..........................

Time allowed : 3 hours Maximum marks : 100

Total number of questions : 8 Total number of printed pages : 3

PART—A
(Answer Question No.1 which is compulsory
and any three of the rest from this part.)

1. (a) State, with reasons in brief, whether the following statements are true or false :
(i) Merchant bankers can acquire shares of the company in which they have got
professional assignment.
(ii) A company can use different modes for buy-back of its shares in a single offer.
(iii) Venture capital is invested in equity securities of new companies promoted by
technocrats.
(iv) No mutual fund scheme shall invest more than 10% of NAV in the equity
shares or equity related instruments of one company.
(v) The placement memorandum is issued for public circulation only.
(2 marks each)
(b) Re-write the following sentences after filling-in the blank spaces with appropriate
words(s)/figure(s) :
(i) Financial system covers both ___________ and credit transactions.
(ii) All certificates in depository are interchangeable and known as _____________.
(iii) Re-issue of existing government securities having pre-determined yields by
the Reserve Bank of India is known as ________________.
(iv) The circuit breakers bring about a coordinated trading halt in both
____________and derivative markets.
(v) _____________ are investment trusts, syndicates or similar enterprises that
are operated for the purpose of trading commodity futures.
(1 mark each)

2. (a) Comment on any three of the following statements :

(i) “A private equity fund is like a hedge fund.”
(ii) “Credit rating is a marketing tool for the companies.”
(iii) “Depository system works very much like a banking system.”
(iv) “Demutualisation of stock exchanges is to convert the traditional stock exchanges
into a company.”
(3 marks each)
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(b) Distinguish between any two of the following :

(i) ‘Public notice’ and ‘public announcement’.
(ii) ‘Disaster bonds’ and ‘convertible bonds’.
(iii) ‘Book closure’ and ‘record date’.
(3 marks each)

3. (a) Write short notes on any three of the following :

(i) Foreign institutional investors
(ii) Portfolio manager
(iii) Trend line
(iv) Money market mutual funds.
(3 marks each)
(b) Discuss briefly the various investment strategies adopted in option trading.
(3 marks)
(c) Expand the following abbreviations :
(i) UCC
(ii) CFTC
(iii) SEFT.
(1 mark each)

4. (a) Explain briefly any two of the following terms related to securities market :
(i) Private placement
(ii) Surveillance at BSE
(iii) Market making.
(2 marks each)
(b) What is ‘collective investment scheme’ ? What are the restrictions on their business
activities ?
(4 marks)
(c) “A well functioning securities market is conducive to sustained economic growth
of a country.” Comment and discuss briefly the regulatory framework of securities
market in India.
(7 marks)

5. (a) Explain the term ‘suspicious transaction report’ under the Prevention of Money
Laundering Act, 2002.
(4 marks)

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(b) What are the obligations of foreign venture capital investor ?
(4 marks)
(c) Discuss briefly the composition, role and responsibilities of an audit committee
under clause 49 of the listing agreement.
(7 marks)

PART—B
(Answer ANY TWO questions from this part.)

6. (a) What is ‘applications supported by blocked amount’ (ASBA) ? Briefly explain ASBA
process.
(5 marks)
(b) Discuss the eligibility criteria and conditions for issue of Indian Depository Receipts
(IDRs).
(5 marks)
(c) State briefly the requirements for bidding process related to public issue of equity
shares.
(5 marks)
(d) What constitutes debt market in India ? Describe the various investors in the debt
market.
(5 marks)

7. (a) Elaborate the various steps involved in the issue of rights shares.
(5 marks)
(b) What is ‘Stipendiary Ombudsman’ ? What are his qualifications ?
(5 marks)
(c) What is ‘offering circular’ ? Explain the contents of offering circular for Euro
issue.
(10 marks)

8. Write notes on any five of the following :

(i) Anchor investor
(ii) Subscription agreement
(iii) Compulsory delisting
(iv) Road show in Euro issues
(v) External commercial borrowings
(vi) Employees’ Stock Purchase Scheme.
(4 marks each)
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2/2010/SLC P. T. O.